Dallas – Fort Worth / Seller Financing Can Be a Powerful Inducement

October’s Mortgage Credit Availability Index shows a slight relaxation in lending standards — but as most Dallas – Fort Worth home buyers and sellers will agree, getting a mortgage is still difficult. With mortgage availability benchmarked at 100, although it’s currently at111 ½, compared with the 800 it stood at in 2007, today’s is still a tough environment.

That’s why Fallas – Fort Worth seller financing is being considered by more homeowners. When a home is owned outright, seller financing can draw a higher selling price (with future interest payments as a bonus). But before making such an offer, Dallas – Fort Worth homeowners need to consider all of the ramifications: there is more involved than just the assumption of added risk.

Of course, ordering and examining a buyer’s credit report is the starting point. If the story it tells needs too many explanations, it’s time to walk away. Foreclosing on a seller-financed home can be more difficult than through a traditional foreclosure —particularly if the financing documents are substandard.

At first blush, seller financing might seem to simplify the whole transaction, but in fact some details usually handled by a bank must be hammered out:

·Who will pay for the appraisal; who for the inspection?

·Who is going to be responsible for property taxes and upkeep?

·Will the deed be transferred to the buyer right away, or only after the home is paid off?

Those issues point out why a “handshake deal” can’t be recommended for a Dallas – Fort Worth seller financing arrangement. Just consider the last two points: if the deed hasn’t been transferred and taxes are in arrears, whose credit is harmed?

A good attorney will draft an agreement that nails down responsibilities and penalties for a buyer default as well as a detailed payment structure. A well-drafted seller financing agreement protects both parties by preventing misunderstandings and providing an unambiguous inducement for good behavior.

Given the right buyer, clear communicating and a framework cemented by the proper paperwork, Dallas – Fort Worth seller financing can provide the missing element that makes a sale possible. If you will be listing your own Dallas – Fort Worth home this fall, when you give me a call, we can discuss many of the different paths to success.